Spending reasonably on prom

Don't tell her I said this, but I'm happy my daughter isn't overexcited about her senior prom.

By Michelle Singletary

recordnet.com

By Michelle Singletary

Posted May. 3, 2013 at 12:01 AM

By Michelle Singletary
Posted May. 3, 2013 at 12:01 AM

» Social News

Don't tell her I said this, but I'm happy my daughter isn't overexcited about her senior prom.

My daughter isn't fawning over dresses. She's still looking and rejecting pricey frocks. She grumbled about the price of the prom - $90 a ticket. The only luxury she's looking forward to is sharing a limo - and the cost - with a group of her best girlfriends.

In fact, when our daughter told us her budget for a dress - $100 "max," she said with emphasis - her father was surprised. "That's all?" he asked.

I immediately shot him a stinky eye.

I thought her budgeted amount was just right for a dress she's not likely to wear again..

Yet many teenagers across the country will do what adults do all the time. They will spend more than they can afford.

For the second year, the spending on proms nationwide has increased, outpacing inflation - reaching an average of $1,139 per family, according to a survey by Visa.

"Prom has devolved into a competition to crown the victor of high school society, but teens shouldn't be trying to keep up with the Kardashians," said Nat Sillin, Visa's head of U.S. financial education.

As far as who pays, parents are kicking in the majority of the funds. But this often results in teens not focusing on the cost, because they aren't paying for it themselves. In looking over the survey, Sillin said he was concerned that many parents making less $50,000 a year were spending more than the average, upward of $1,200.

Parents are always asking me how to teach their children good financial habits. The best way is to use teachable moments that come up in their lives. The prom is a perfect time to show your child how to budget sensibly.

So, have you had the talk?

Did you set specific dollar limits for all the expenses - dress or tux, shoes, hair, corsage (do the young men still do that?), limo, pictures and the after-party?

To help with budgeting, Visa launched a free smartphone app - Plan'it Prom - that allows parents and teenagers to manage prom expenses.

To stay within a budget, prom spenders need to set limits. You'll find a suggested budget ceiling for 13 categories, including tips to cut costs. The recommended amount for a prom dress, for example, is $145.

The app comes with a "budget health meter" to let users know when they are overshooting their spending plan. It's available at the iTunes and Google Play stores and at practicalmoneyskills.com/prom.

This is parents' chance to emphasize that a budget matters. So if your daughter is pining or whining for a $300 or $400 dress but you've budgeted $700 total for the prom, she's got to cut expenses somewhere. This is a good financial lesson on discerning what's important when you have limited funds.

Contact Michelle Singletary, a personal finance columnist at The Washington Post, at singletarym@washpost.com.